Fidson grows sales by 28%

Fidson Healthcare Plc grew its top-line by 28 per cent in 2013 as the healthcare company increased its market share.

Key extracts of the audited report and accounts of Fidson for the year ended December 31, 2013 showed that total sales rose from N7.2 billion in 2012 to N9.2 billion in 2013. Gross profit also rose by 25 per cent from N4 billion in 202 to N5 billion in 2013.

The increase in sales and better management of operational costs led to higher gross margins, which saw operating profit rising from N854 million to N1.3 billion

However, profit before tax dropped considerably from N540 million in 2012 to N250 million in 2013. Profit after tax also followed the downtrend, dropping from N207 million to N155 million.

Management of the company indicated that the decline in pre and post tax profits was due to impairment loss incurred on Fidson Products Limited, an associate company that was adversely affected by the ban on importation of diapers, the major product of the company.

However, other comprehensive income majorly from actuarial gains at N42 million against a loss of N19 million the previous year moderated total comprehensive income for the year to N197 million, up from N188m in 2012.

Fidson’s balance sheet grew by 15 per cent from N10.8 billion in 2012 to N12.4 billion, mainly resulting from the company’s investment in the Biotech plant.

Management of the company said they expected better performance this year citing increase in pre-tax profit in the first quarter. Profit before tax for the first quarter stood at N283 million as against N269.6 million recorded in corresponding period of 2013.

Fidson recently said it was rounding off pre-offer process to issue a N2 billion bond to partly refinance its new multi-billion Naira World Health Organisation (WHO)-standards manufacturing complex.

Operations Director, Fidson Healthcare Plc, Mr. Biola Adebayo, said the company is concluding arrangements for the bond issue noting that the bond may hit the capital market next month.

According to him, the net proceeds of the bond issue would be used to refinance some existing bank loans with a view to consolidate the bank loans into a more amenable medium term bond issue. This is part of the company’s financing mix strategy to ensure that the benefits of its expansion impact on shareholders’ returns.

Adebayo said the company has spent N7 billion on the new manufacturing plant and all the equipment and machines are currently on site. The company has so far financed the new 7.5 acres-manufacturing plant with internally generated revenue and loans from banks.

He said the new manufacturing plant, which will aggregate the existing manufacturing lines from other existing plant and add a new line for intravenous products, will likely be commissioned in the third quarter of 2014.

He projected that the new business line of intravenous add between N3 billion and N4 billion to the company’s turnover in 2015.

He said the new manufacturing plant is a game-changing investment that will further enhance Fidson’s leadership position in the healthcare industry and position it in good stead to compete for global healthcare funds and orders.

He said the new plant would further enhance the local manufacturing capacity noting that the company’s current product profile of 60-40 importation/manufacturing ratio to 40-60, shifting the company’s operations towards local manufacturing.

He added that the new manufacturing plant, which is being built to WHO standards and certification, will enable Fidson to engage in contract or tall manufacturing for many global pharmaceutical companies, which want to manufacture their products in Nigeria but do not want to establish full-fledged manufacturing plants.

Adebayo noted that the prospects for the company’s growth is huge pointing out that there are no more than three companies manufacturing its new line of intravenous products and the volume needed by the country is so huge.